Nine West’s 40th anniversary celebrations have been dimmed by bankruptcy.
The women’s fashion, footwear and accessories company, Nine West Holding, announced Friday that it has filed voluntary petitions for reorganization under Chapter 11.
The company stated that the filing was made to facilitate the sale of its Nine West and Bandolino footwear and handbag business to Authentic Brands Group, and to “right-size its capital structure around its profitable and growing businesses, including One Jeanswear Group, The Jewelry Group, the Kasper Group, and Anne Klein.”
Nine West as entered into a Restructuring Support Agreement with the majority of its credits and will use a $300 million loan to maintain its operation during the course of the Chapter 11 case.
“This is the right step to address our two divergent business profiles. We will retain our strong, profitable and growing apparel, jewelry, and jeanswear businesses and continue to operate them under a new capital structure so that we can leverage their existing strengths to drive even greater growth. Once we complete the reorganization process, our Company will have meaningfully reduced debt and interest costs and be well positioned for the future,” Ralph Schipani, Nine West Holdings CEO, said.
Rumblings about Nine West’s future began in January when reports surfaced that the company was working with creditors on a strategy to restructure its $1.5 billion debt load.
However, Nine West missed a debt interest payment in March, which instigated a 30-day period in which the company must either make the payment or face bankruptcy, Reuters reported.
Nine West, which sold its Easy Spirit wholesale business in 2016, purchased the tailored clothing company Kasper Group in January 2017. The Nine West portfolio of brands includes Anne Klein and Gloria Vanderbilt, and its wholesale and international licensing agreements cover more than 1,200 retailers worldwide.
Nine West is owned by private equity firm Sycamore Partners. The company acquired the Jones Group Inc., then the parent company of Nine West, in 2014 for $2.2 billion. It sold off Jones Group’s designer footwear labels Stuart Weitzman and Kurt Geiger.
Reuters said some Nine West creditors plan to pursue claims against Sycamore for those sales, claiming the divestitures of the shoe companies made Nine West insolvent.
Nine West adds a fashion component to Authentic Brands Group’s footwear portfolio. The company’s brands include comfort footwear label Taryn Rose, skate shoe brand Airwalk, sneaker brand Tretorn and heritage boot brand Frye.
ABG recently announced it would buy the sportswear brand Nautica from VF Corp. The transaction will mark a major milestone, completing its largest brand acquisition and propelling its portfolio to nearly $7 billion in global retail sales.
An earlier version of this story alluded to the bankruptcy before Nine West formally announced it.